Caterpillar announced today that production of their Cat line of trucks will cease with no further orders accepted as existing customer orders are fulfilled. BOOM! Just like that the dream is over. This past summer Caterpillar announced plancs to bring production of their trucks in house, back from a Navistar facility in Mexico and into a excavator plant in Victoria, Texas. Over two hundred jobs were expected to be created and Cat flooded social media and the press with fancy videos about sticking to the product line and creating jobs. This turn of face might be surprising but not totally unexpected.
Back in 2011 when Caterpillar announced their line of CT heavy duty trucks I was excited, as any truck fan would be at the promise of new iron on the road. However, the part of my brain that suffered at the hands of various marketing professors in college couldn’t help but feel the heavy duty truck market in North American is a mature one. This means entry costs are high while opportunity for success is low. Long established manufactures have the market carved up, with single digit sales increases stolen from each other as one of the few avenues of growth. Hoping to defy the odds Caterpillar partnered with one these existing players to utilize their experience and facilities. Some might say this was the first mistake as International was entering a phase of disastrous engines and product quality. The CT line was billed as premium truck but many found it hard to look past the DNA it shared with the International Paystar. Anytime I saw this truck at a trade show the poor sales folks couldn’t go one minute with out the “ain’t this just a International with an ugly hood” comment flying through the air.
Despite a product line of three unique models, one of which was just introduced this past summer, Cat was only able to move, at best, 1200 units a year. In the age of shareholders demanding increased returns with each quarter a business unit like the truck line was just the right sacrificial goat for the time.
“Remaining a viable competitor in this market would require significant additional investment to develop and launch a complete portfolio of trucks, and upon an updated review, we determined there was not a sufficient market opportunity to justify the investment,” said Ramin Younessi, vice president of Caterpillar’s Industrial Power Systems Division.
And there you have it, the corporate press release we all knew would fall if given enough time. Say what you will but I’m sad to see Cat go. It’s always good to have an outsider muscle their way in to the established club. With their an intrusion new products, ideas, and service become mandatory no matter the age of the market. Maybe this was the problem with Cat trucks along, they tried to follow the path already blazed by others decades ago.
In memory, a collection of some of the Cat trucks I saw in person. I always thought I was being cheated but now that I know they sold less than 10,000 over 6 years I figure I saw a good portion!
Source: Caterpillar to End Cat Truck Program – TruckingInfo.com